HEALTH INSURANCE

Evening Post, Volume CXXIII, Issue 48, 26 February 1937, Page 15

HEALTH INSURANCE

FARMERS' SUPPORT

PSYCHOLOGICAL VALUE

REMOVING WORRY

Support for a national health scheme based on compulsory contributions collected on the principle of a wages and salary tax is expressed by the New Zealand Farmers' Union. A statement issued by the union states that such a scheme would remove the financial worries of sickness from the worker of slender means and would help to prevent serious sickness. The scheme would have to be self-supporting and should not be centralised. The unemployment tax had shown the feasibility of collecting premiums, and a flat tax of 4d in the £ would provide the estimated expenditure. Attention is also called to the present' method of hospital taxation, which, it is contended, is unfair to the rural population. "There is no question that the institution of a sound scheme of national health insurance would avoid much hardship and a good deal of poverty which follows in the wake of a serious illness in a family of slender means," states the union. "The worry on account of financial liabilities which usually accompany severe illness would to a great extent be obviated. Relief from this anxiety would tend to hasten convalescence and reduce the danger of too soon a return to work, with the consequent liability of future trouble. There would also be a large amount of prevention of serious sickness and a considerable reduction of the period of invalidity by early diagnosis." MAIN PRINCIPLES OUTLINED. The main principles which the union considers should guide the formation of a national health insurance policy are:— 1. That it be of universal application. 2. That the contributions be compulsory on all adult individuals and that it be supported by the contributions of the beneficiaries. 3. That within reason there should be free choice as between doctor and patient. 4. That the control of the scheme should be as decentralised as it can possibly be consistent with the maintenance and uniformity in the main lines of the policy. "The benefits of the scheme," the statement continues, '"should be available to all contributors and their dependants, which under our suggestion means to the whole of the population. Broadly, these should include all medical and related services and material necessary to the safeguarding of health and the efficient treatment of disease, and also include medical and nursing services for maternity cases. In addition to hospital services, nursing services should be available for those parts of the country which are too far distant to benefit from hospitals and for such cases that may occur where removal to hospital owing to the nature of the case is not practicable. "It is important that the benefits should be restricted to essentials, as otherwise the scheme may become too heavy a charge, especially upon the smaller wage-earners. On this account careful consideration should be given the proposal to include dental and ophthalmic services in the scheme. While some of these services would undoubtedly rightly come under such a scheme as this, what might be termed routine work should; we think, be excluded. In our opinion, the benefits should not include anything in the nature of pensions, which should be dealt with by some separate arrangement. METHOD OF FINANCE. "The method of finance is of great importance. The union considers that it should be financed by direct contribution by beneficiaries. At the present time, in theory, patients who are able to pay are expected to pay for their treatment ■at hospitals. As this liability falls on the patient at the' time when sickness has reduced or eliminated his ability to pay, it becomes, to the more decent, a worry; to the more careless a means of avoiding payment altogether. It has been stated that only one in five of the patients at the public hospitals in New Zealand pay for their treatment. The scheme under discussion means that they will be called upon to pay while they are well and in employment and easily able to make these payments. "The unemployment tax has shown the feasibility of making a universal charge on all wages and income. The difficulty of collecting such a charge has, in the past, been urged against this method of finance, but recent experience has shown that this objection is not well founded. The union suggests that by similar means to that used to collect unemployment tax, a charge at a flat rate per pound on wages or income of all individuals, including Maoris, should be collected to finance the scheme. However, there should be no charge on the income of companies or other corporate bodies, but the dividends from these received by individuals would, of course, be chargeable and the charge payable by the individual receiving it. ■ "The funds of the scheme should be regarded :as . private property, and should be vested in the controlling authority and not in the Government or the Crown, and should in no circumstances be available to the Government any more than those of any other private corporation or individual, as they are, in fact, the private property of the contributors. "The unemployment tax of 1935-36 provided a fund of £3,921,975, and an additional tax of 2d in the £ would have more than provided the £ 600,000----odd raised by hospital board rates. It would appear that a. flat rate tax of 4d jn the £ would more than provide the £1,041,000 annual cost estimated by the Hospital Boards' Association as the annual cost of a national health insurance scheme. ' IMPOST ON RURAL AREAS. "While hospital finance was not an original; factor in determining the union's support of the principle of national health insurance, consideration of a concrete scheme shows that it can help materially to relieve that position. The heavy impost that the present system of financing hospital expenditure involves on rural ratepayers has been a matter of concern to the union for many years. The relatively increased urban population has unavoidably increased hospital expenditure, and the point has been reached where the demand on the country districts is becoming so heavy that the system threatens to break down, or, at least, fail to provide for hospital facilities keeping pace with the growing needs of urban populations. While our towns and cities were small, the present method of finance was well enough; though not fair, it did not seriously penalise the country ratepayers, but during this century the position has changed materially with the rapid growth of the towns and cities, and the hospital rate is now a serious charge on farmers.

"It must be stressed that the farmer cannot pass on any of his charges. He must sell in the world's markets, but

he must buy in New Zealand markets at high prices swelled largely as a result of public expenditure in the past. We have seen the decline of the position of the farming, industry over, the last fifteen years, but it must be stressed that this is due to a great extent to the fact that the farmer's costs of production have increased and his net returns have shown a steady tendency to diminish. This process cannot continue, and every means by which it can be checked should be adopted. The incidence of hospital taxation is one of the avenues by which relief can be given to the farmer, and when we realise that hospital expenditure has increased from approximately 10s per head in 1914-15 to approximately 17s per head at the present time, it will be seen that the burden of rating for hospital upkeep must have increased very considerably.. . PASSING RATES ON. "It will be argued, of course, that while a large proportion of this money is raised by rates from rural districts, a large amount of it is raised by rates on city properties. It must be pointed out, however, that a great deal of this rating on city properties, i.e., on those used for commercial purposes, is passed on to the public in the form of a part of the cost of the goods they consume. The farming industries are the main sources of wealth in New Zealand and also large consumers. Eventually a large portion of this increased cost is passed on to them, making it difficult for them to compete witlr rival countries such as the Argentine. The effect of this has been experienced by members of the union, and accounts for their making continued representations to the Government of the day on this subject. During the last ten years the annual Dominion conference of the New Zealand ; Farmers' Union has made repeated representations to the Government on the subject. "With regard to hospital rating We find that various remits have been carried during the last ten years on this subject such as drawing attention to the fact that 'the present method of collecting hospital revenue is not equitable.' In. 1936 a resolution was again passed opposing the use of State lotteries for the purpose Of hospital finance, and another one was carried protesting against the present incidence of hospital and charitable aid taxation as being inequitable, and the Dominion executive was again urged to take up the matter with the Government with a view to devising a more equitable method of levying this taxation. "At the present time it is estimated that rural ratepayers- contribute 53 per cent, of hospital levies, whereas city and town dwellers find 47> per cent. Oh d population basis urban dwellers would probably contribute approximately 60 per cent., while country people would, contribute 40 per cent. - It is claimed by the union that there should be some relation between the number of people availing themselves Of the services of the hospitals and the payment which is made by them for that purpose, i.e., the city people make much greater use of hospital facilities than do . country people, and at the present time they contribute a less share of the cost. It is quite realised that some modification of this may have to be effected, but it is submitted that the flat rate levy basis of taxation for hospital expenditure should provide the major proportion of the funds for this purpose. It must be stressed that the Farmers' Union would not support a national insurance scheme which was not financed by direct contributions and which gave no relief from the present inequitable system of taxation. VALUE TO COMMUNITY. "The Farmers' Union supports the scheme 'of national health insurance because it feels that such a scheme would improve the health of the community, remove a constant anxiety from thousands of breadwinners, tend to increase the happiness and also the economic value of the individual by removing one of the great deterrents to obtaining early medical advice in the case of suspected trouble —i.e., the cost—thus frequently enabling the malady to be dealt with in an incipient stage. "The union further supports it because it would enable the individual to pay the cost of sickness while in health and so remove the worry of debt which is a frequent cause of slow convalescence, and also the laying of the foundation of future trouble by a too-early return to work. The scheme should be universal and its benefits available to all individuals in need of them. It should be financed by direct contributions by every person in receipt of wages or income of any description. It should take over the present liability of ratepayers for hospital maintenance. "The funds of the'scheme should be protected by legislation from being used for any other purpose whatever. The scheme should be designed as far as possible so as to retain the keenness of the medical profession and to maintain the high professional standards now in existence in New Zealand. In the Farmers' Union opinion the natural corollary of a national health insurance scheme is a compulsory national provident fund; ensuring pensions for sickness,' disability, and old age, so:

completing the protection of each individual against the financial stress of, life's misfortunes."